U.S. President Barack Obama's point man in the Middle East is heading
to the region for a new peace mission.

Israeli settlement expansion will top
the agenda, as U.S. envoy George Mitchell holds separate talks with
Israeli and Palestinian leaders. The United States is pushing Israel to
freeze settlement construction in the West Bank and East Jerusalem, an
issue that has soured relations between the two countries.

The
U.S. and Palestinians see the settlements as an obstacle to peace.
Veteran Israeli diplomat Avi Pazner says Israel is seeking a compromise.

"This
is a negotiation," he said. "It's a give and take on all parties, from
the Israeli side, from the American side, from the Arab side, from the
Palestinian side. We hope that there is good progress."

Israel
is offering a partial settlement freeze: construction on 3,000 housing
units in the West Bank will continue, but no new projects will be
approved. Also, Israel will not halt construction in disputed East
Jerusalem, which it sees as part of the indivisible capital of the
Jewish state.

The Palestinians say anything short of a complete
freeze is unacceptable. Palestinian negotiator Saeb Erekat told Israeli
Army Radio that Israel is ignoring the internationally-backed roadmap
peace plan.

"When we say Israel must freeze settlement
activities, including natural growth, that's not a Palestinian
condition; that is an Israeli obligation emanating from the roadmap,"
he said.

The Palestinians say they will not return to the
negotiating table until all settlement expansion stops. Israel, on the
other hand, is ready to resume peace talks without preconditions. Now
it's up to George Mitchell to try to bridge the gaps.